In accordance with the provisions of the Wills and Succession Law, there are two kinds of domicile:

domicile of origin, i.e., the domicile received at birth (generally dependent on the father’s side), or

domicile of choice, i.e., domicile acquired by establishing physical presence in a particular place and by demonstrating sufficient intention to make it the place of permanent residence.

​

Irrespective of the domicile of origin or choice, individuals who have been tax residents in Cyprus for at least 17 out of the last 20 years prior to the tax year in question, will be deemed to be domiciled in Cyprus for the purposes of the SDC Law.

​

In the case of persons who have their domicile of origin in Cyprus, they will nevertheless be considered as non-domicile in the following cases:

• If they have acquired and maintained a domicile of choice outside Cyprus, if they were not tax residents in Cyprus for any continuous period of at least 20 consecutive years prior to the tax year in question; or

• If they were not tax residents in Cyprus for a period of at least 20 consecutive years immediately prior to the entry into force of the non-domicile provisions (i.e., prior to 16th July 2015).

​

Tax Benefits of Non-Domiciled Persons

As per the provisions of the Cyprus SDC Law, dividends and bank deposit interest earned by individuals who are tax residents in Cyprus are subject to SDC tax at the rate of 17% and 30% respectively, regardless of the source of the income (i.e. from Cyprus or from abroad). SDC tax applies only for individuals who are both Cypriot tax residents and domiciled in Cyprus.

​

Therefore, non-domiciled tax residents will be completely tax exempt from any dividends and interest received in Cyprus (except for minimal GeSY contributions), Since 1 March 2019, Dividend income is subject to GeSY contributions, (at the rate of 1.7% from 1 March 2019 until the 29 February 2020, then increased to 2.65% from March 1, 2020), restricted to a maximum of EUR180,000 income annually.

​

Furthermore, foreigners becoming tax residents also enjoy many other significant tax advantages (both domiciled and non-domiciled).